Question: Calculate basic and diluted EPS. The company reported earnings were 100.000.000 EUR. At the beginning of the period the company had 30.000.000 common shares outstanding.

Calculate basic and diluted EPS.

The company reported earnings were 100.000.000 EUR. At the beginning of the period the company had 30.000.000 common shares outstanding. At the beginning of the third quarter the company performed a share buyback and the number of common shares was reduced to 20.000.000 Total amount for preferred dividends accounted for 20.000.000 EUR. Moreover, the board recommended dividend for common shareholders (payment of 25% of the outstanding earnings). At the beginning of the year the general meeting of shareholders approved an option incentive plan for the management and 1.200.000 options with strike price of 40 EUR were issued. The stock price experienced a high increase in the last two quarters with the average price equal to 50 EUR.

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